The Portland daily press., 1887-05-28
recently advanced the theory that agriculture

recently advanced the theory tnat agriculture
was the sole source of wealth.
marked that 1t is patent to. all, and scarcely
needs mention. Take the item OF banks. In
stead of three banking corporations, we
have nearly If not quite thousand times as
many organized under national law; TO say
nothing about those organized under the
laws Of the various States. Instead Of one
charter in thirty years in one State, we find
that in the single commonwealth OF Texas
eighty charters were granted IN ninety days
in 1885.
The most significant fact. however, is the
rapidly increasing proportion OF all the re-
sources of the country which belongs to cor
porations. Hon. Abram s. Hewitt stated
few years ago that corporations were mod
ern institutions, thatprivate corporations did
not exist fifty years ago, but that they now
owned from one-third to one-haf of the cap
ital Of the civilized world. This Is not accu-
rate in every respect, but it is important as
registering the results of the observation Of
an active business man. Another authority
has estimated that the wealth of corpora
tons in the United States is increasing three
or four times as rapidly as that Of private
concerns. While opinions like these are
more or less uncertain, they are Of value be-
cause in the main they harmonic with the
results of all investigations which have been
made.
While there is, then, history of joint
stock associations Of capital with limited liza
bility, which may be traced back for four
hundred years, and some features of which
are still older, 1t is true that corporations de-
voted to gainful pursuits have only in very
recent years assumed vast Importance in the
economic life of the world.
The question now arises What are the
causes which have led to such m0mentous
changes in the organization of industry dur
Ing the past fifty years? The answer is not
difficult. Owing to discoveries and inven-
"a Of 10
industry and transportation, it became nee
essary to prosecute enterprises of great mag
nitude such as could not be comprised by
the resources Of an individual or combina-
ton Of individuals in the ordinary
copartnership, This applies especially
transportation. To provide these instru-
ments of economic life has been generally
regarded as one of the functions of govern
ment, municipal, State, and Federal, There
either directly, or the duty might be trans
ferred to private corporations: There was
in either case the same problem to solve,
namely, the management OF enterprises OF
unparalleled magnitude by delegated action.
In one case managers would be chosen by
the citizens to promote the welfare of the
community. The electors would have the
prosperity of their business interests more
or less at stake, and would in so far have q
motive to induce them either themselves TO
select good men to manage such important
undertakings or to see that their elected
agents appointed such men, as the case
might be. The managers themselves would
as citizens be interested in the success OF
the enterprises intrusted TO them. On the
other hand, there would be the danger Of an
abuse Of public trust In the case of the
adoption of the corporate principle, the
stockholders, in s0for as their interests are
not merely speculative, must desire to elect
directors who will so manage their property
that it will yield large dividends, while the
directors, themselves stockholders, wish a
return on reimbursement. On the other
hand. as has already been pointed out. the
the interest of the directors is often not
identical with that of the property they
manage. and they are, as experience demon
strates, oftener faithless to their trust than
public servants, while the opportunities for
their exposure and punishment are less IA
vorable. They may wish to injure the I'M
dertakings in which they exercise control in
order to buy shares at lower prices than they
are really worth, or they may desire to sac
rifce its future to the present for the sake
of high dividends, so that the price Of stock
may rise unduls, thus enabling them to 'un-
load" with profits ON too credulous public.
Again, directors may find 1t to their advan-
tage to neglect their interests as stoekhold-
ers in a corporation in order to promote
their interests as individualssor members of
firm engaged in some other enterprise. An
example Is seen In railway directors who
give themselves special freight rates. :.
Then our States had tried some expert
ments IN Internal Improvements, including
railway construction, and had encountered,
very naturally, grave difficulties. So in the
enthusiasm for ldissez .fdire, which it was
held was certain to usher in an era of peace
and wealth, we abandoned the attempt to
perform many public functions which cor
porations weIe only too anxious to assume. :.
Thus did we transfer to corporations our
railways, and in general all the chief means
of communication and transportation, save
the postoffice, upon which the covetous eyes
Of promoters had been fastened, happily in
vain. Even our municipal water-works were
occasionally handed over to corporations,
gas supply was, as rule, intrusted to them,
and street-car lines without an exception.